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Business Management Chapter 1.3 Organizational Objectives (Mission (to…
Business Management
Chapter 1.3
Organizational Objectives
Vision
image of an ideal situation in the future
outlines an organization's aspirations (where it wants to be) in the distant future
focused on very long terms
Mission
to have a clear purpose
a simple declaration of the underlying purpose of an organization's existence and its core values
does not have a dinstinct time frame
more qualitative rather than quantitative
provides a sense of direction, guides decision making and unifies all people and corporate cultures within the organization
focused on the medium or long term
Aims
general and long term goals
broadly expressed as vague and unquantifiable
give general purpose and direction
set by the senior directors
Strategies
plans of action
Operational strategies
day-to-day methods
improve effifiency
to achieve tactical objective
Generic strategies
affect the business as a whole
Corporate strategies
targeted at the long term goals
achieve the strategic objectives
Objectives
short-to-medium-term and specific targets
more specific and quantifiable(measurable)
set by managers and their subordinates
Tactics
short term methods
to achieve tactical's objectives
Objectives
Strategic objectives
profit maximisation
growth
market standing
image and reputation
Tactical objectives
survival
sales revenue maximisation
The need for changing objectives
Internal factors
Corporate culture
Type and syze of organization
private vs. public sector organization
age of the business
Finance
Risk profile
Crisis of management
External factors
State of the economy
Government constraints
The presence and power of pressure groups
New technologies
Ethical objectives
Ethics
moral principles that guide decision making and strategy
Morals
what is considered to be right or wrong from society's point of view
Business ethics
the actions of people and organizations - considered to be morally correct
acts morally towards workers,customers, shareholders and environment
Advantages (CSR)
Improved corporate image
Increased customer loyalty
Cost cutting
Improved staff morale and motivation
Limitations (CSR)
Compliance cost
Lower profits
Stakeholders conflict
Ethics and CSR are subjective
Corporate Social Responsibility (CSR)
views and attitude to do CSR (business)
self-interest non-compliance) attitude
the altruistic attitude
strategic attitude
The evolving role and nature of CSR
may change over time
its nature is rather subjective
'right' or 'wrong' is largely based on public's opinion - change over time
changes in societal norms
business - view the CSR policies from time to time
Business - change objectives - reflect on their part in in preservation of the planet
CSR depends on the different countries
How business adapt to the evolving nature of CSR
Providing accurate information and labelling
Adhering to fair employment practices
Having consideration for the environment
Active community work
SWOT analysis
S.W.O.T.
Strengths
internal factors - favourable compared with competitors
Weakness
internal factors - unfavourable compared with rivals
Opputinities
external possibilities (prospects) - future development
changes in the external environmentthat create favourable conditions (business)
Threats
external factors - hinder the prospects
cause problems
Uses
Competitor analysis
Assessing oppurtinities
Risk assessment
Reviewing corporate strategy
Strategic planning
Advantages
simple and quick
wide range of applications
determine the organization's position in the market - aids the formulation of business strategy (long-term survival)
encourages foresight and proactive thinking (decision-making process)
reduce the risks of decision-making - demanding objective and logical thought process
Disadvantages
simplitic and doesn't demand detailed analysis
Model is static - business environment is always changing (SWOT - limited)
useful - decision makers are open - weakness and are willing to act upon them
not typically used in isolation
The Ansoff matrix
Market penetration
low-risk growth strategy
selling
existing
products in
existing
markets
increase their market share of currents products
offering more competitive prices
focus on products and markets that are familiar with
Product development
medium-risk growth
selling
new
products on
existing
markets
rely heavily on product extension strategies - prolong the demand for goods and service
Market development
selling
existing
products in
new
markets
Medium-risk growth
established product is marketed to a new set of customers
firm is familiar with the product being marketed
Diversification
high-risk growth
selling new products at new market
holding company (parent company) having presence in a range of markets in different regions of the world
use of subsidiaries and strategic business units